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A credit card number — that long string of digits on the front or back of every credit card — contains more information than you might think. Though credit card numbers may seem rambling and random, each digit actually has a specific purpose and place. The number you see on a credit card provides information about the individual account holder, the payment network, and the card issuer. It also uses a special formula to help prevent transaction errors and fraud.

Here, gain a deeper understanding of the significance of each digit.

What Is a Credit Card Number?

A credit card number is a set of digits — usually 16 — that’s printed on the front or back of a credit card.

It’s important to note that your credit card number is not the same thing as your account number. Your credit card number includes your account number, but it has additional digits (an account number typically has 12), and it provides more information. When you make a credit purchase online or on the phone, you can expect to be asked for your full card number to authenticate the transaction.

Though the information provided by every credit card number is basically the same, the format may differ a bit from card to card: Sometimes the numbers are raised; sometimes they’re flat. And generally, although not always, the digits are divided into four sets of four (xxxx xxxx xxxx xxxx).

The format for credit cards and debit cards is similar — which is why you might pull out the wrong card from time to time.

Who Decides What Your Credit Card Number Is?

Your credit account number is assigned by the financial institution that is your credit card issuer. But the structure and sequence of the digits in your credit card number must follow a rigid set of standards imposed by the International Organization of Standardization (ISO) and enforced by the American Network of Standards Institute (ANSI).

All card issuers follow these rules, so consumers can use their cards or card numbers no matter where they are in the world.

Credit Card Number Structure

Even if you know what a credit card is and how credit cards work, you may not be familiar with what the numbers on your card mean. Though most credit card numbers have 16 digits, the length may vary. Of the four major card networks, Visa, Mastercard, and Discover card numbers all have 16 digits, while American Express card numbers have only 15. Here’s what those digits actually mean.

The First Number: Industry Identifier

The first digit in a credit card number is known as the Major Industry Identifier (MII), and it can tell you both the industry associated with the card and the payment network.

Payment Network

Most credit cards start with a 3, 4, 5, or 6. These numbers represent the major payment networks, each of which has its own identifier:

•   American Express cards begin with a 3

•   Visa cards begin with a 4

•   Mastercard cards typically start with a 5, but may start with a 2

•   Discover cards start with a 6

Knowing your credit card’s payment network can be useful, because the network determines which merchants will accept the card. Your favorite local market or small boutique might accept credit card payments with a Mastercard, Visa, or Discover card, for example, but they may not let you pay with American Express.

Recommended: When Are Credit Card Payments Due

Industry Association

There are many different types of credit cards. Some credit cards are meant for general use, while others may be geared to a more specific purpose. The MII can tell you which type of industry your card is most associated with. Here’s what some MIIs generally mean:

•   1: Airlines

•   2: Airlines and financial

•   3: Travel and entertainment

•   4: Banking and financial

•   5: Banking and financial

•   6: Merchandising and banking

•   7: Petroleum

•   8: Health care and communications

•   9: Government and other

The Next 5 Numbers: Identification Numbers

The next five digits complete the Bank Identification Number (BIN), or Issuer Identification Number (IIN). This can tell you who the card issuer is.

The credit card issuer is the financial institution that offers the card and manages your account. Some of the largest credit card issuers in the U.S. include American Express, Bank of America, Capital One, Chase, Citi, Wells Fargo, and Discover.

When you apply for a credit card, it’s the issuer who accepts or declines your application. When you make a purchase, you’re borrowing money from the credit card issuer, and when you pay your bill, you’re paying back that money. Any time you check your balance, request a higher credit limit or a lower interest rate, or obtain a replacement card, you’re doing it through your credit card issuer.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Next 9-12 Numbers: Account Identifier

The remaining digits on the card — except for the very last one — identify the account and the cardholder.

Don’t worry, there isn’t a secret indicator in your card number that tells people how often you’re using your credit card or if you’re paying your bills on time. This part of your card number simply represents what account the card is connected to.

If your card is lost or stolen, or your card number is compromised in a credit card scam, you may notice that the number on your replacement card has changed, even if your account number hasn’t. So if you’re keeping a list of card numbers in a secure place, you may have to update that card number.

Recommended: Tips for Using a Credit Card Responsibly

The Last Number: Checksum

The last digit of a credit card number is referred to as the “checksum” or “check digit.” Card issuers and payment networks use it to catch errors and help protect against unauthorized card use. (Let’s face it: Even if you follow all the so-called credit card rules, things can happen.)

When a card is used for a purchase or payment, this digit is used as part of a mathematical formula called the Luhn algorithm to verify the card’s validity. If the checksum doesn’t work, the transaction is quickly rejected. (If you’ve ever mistyped your card number when shopping online, you’ve seen this algorithm in action.)

Most major networks use the final digit as the checksum. However, if you have a Visa credit card, it may be the 13th digit.

What About the Other Numbers on the Card?

Besides the card number, there are two other sets of digits that also can play a critical role when you use your credit card.

Card Verification Value (CVV)

The Card Verification Value (or CVV number on a credit card) or Card Verification Code (CVC) is also used to protect the card owner. If you do a lot of online shopping, you’re probably very familiar with this three- or four-digit number, which usually is found on the back of a credit card near or inside the signature strip.

On some cards, there may be seven digits in this spot. If this is the case, the first four digits you see are the last four digits of your credit card number. The last three digits in the grouping represent the CVV.

If you have an American Express card, the CVV is a four-digit number located on the front of the card, just above the logo.

The CVV is designed to help protect against identity theft. If you aren’t presenting your card in person during a transaction (because you’re using it online or over the phone), providing the CVV can help prove you’re in possession of the physical card.

Expiration Date

The expiration date offers yet another layer of protection for the card holder. Most businesses require that you provide the credit card number, the CVV, and the card’s expiration date when you make an online purchase.

The credit card expiration date typically appears on the front of the card with two digits for the month and two digits for the year (xx/xx). But if the account number is printed on the back of the card, you’ll likely find the expiration date there.

Even if you never need to use it to make a remote purchase or payment, it can be a good idea to glance at your card’s expiration date from time to time. That way, you can ensure you always have a current card in your wallet.

You’ll also know when it’s time to watch for the arrival of a replacement card. If a new card doesn’t arrive in the month the old card expires, you can call the issuer and immediately take steps to protect yourself if it appears the card has been lost or stolen. (The phone number for customer service is also on your card.)

The Takeaway

At first glance, the number on your credit card might look like a meaningless jumble. But if you take a closer look, you’ll find each digit has a purpose — to provide information, to help keep your account secure, and to make the card more user-friendly.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Where do I find my credit card number?

Your credit card number may appear on the front or back of your credit card.

Is the credit card number the same as the account number?

No, the two numbers are linked, but they are not the same. Your credit card number includes your account number, but it has more digits, and those extra digits are important to how each transaction is processed.

How long is a credit card number?

A credit card number typically has 16 digits, but the number can vary. American Express uses a 15-digit format for its credit cards.

Can a credit card number be stolen?

Yes. A credit card number can be stolen in multiple ways: through the theft of a physical card, during a data breach, with a card skimmer, or if the cardholder uses an unsecured website or public Wi-Fi when making a credit transaction.

Photo credit: iStock/max-kegfire

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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A credit limit is basically what the term suggests: A financial cap on a credit card account that limits how much money the cardholder can borrow from the card issuer. By including a maximum spending amount, the card issuer buys itself some protection against the cardholder borrowing more than they can pay back on an ongoing basis.

There’s more to the story, however, when it comes to credit card limits and how they’re determined. Here’s a closer look at what a credit limit is and what happens if you go over your credit limit.

What Is a Credit Limit?

As mentioned, a credit limit is the maximum amount that you can charge with your credit card, which represents a line of credit. The amount is determined based on information provided in a credit card application, such as the applicant’s credit score, income, and existing debts. Usually, the higher the credit, the higher above the average credit card limit someone will receive.

It’s also important to note that credit card limits aren’t set in stone. A cardholder may receive a higher credit card limit if they make their payments on time and stay well within their credit limit. Conversely, if card payments are late (or worse, not made at all) or if there are other signs of risk, such as nearing or exceeding their credit card spending limit, then the card issuer may decrease someone’s credit limit.

Recommended: What is a Charge Card

Credit Limit and Available Credit

Each purchase made with a credit card is deducted from your total credit limit, resulting in your available credit. For example, let’s say someone has a credit limit of $10,000. If they spend $2,000 at a store that accepts credit card payments, their available credit falls to $8,000. If they were then to make a $1,000 payment toward their balance, their available credit would increase to $9,000.

In this way, your available credit will fluctuate over time depending on purchases and other transactions you’ve made, as well as any payments, including credit card minimum payments, made on the account. Your credit limit, on the other hand, remains constant regardless of account activity.

Credit Limit and Credit Scores

There’s another good reason to keep your credit card spending in check, and significantly below your card limit — it affects your credit score.

When FICO® (one of the most popular credit scoring systems) calculates its benchmark credit scores, it places a significant weight (30% of its total credit score calculations) on credit utilization. Credit utilization ratio compares the amount of credit a cardholder is using to the total available credit they have.

For instance, a card owner may have $10,000 in total available credit, but owe a total of $9,000 on the card. That represents a 90% card utilization, which is considered high and may raise a red flag for lenders. It may suggest overspending and potentially an inability to pay. As such, a high credit utilization ratio could result in a lower credit limit for the cardholder, whether that’s a decrease on their existing limit or lower limits offered on new accounts.

It’s usually recommended that cardholders keep their card utilization rate below 30% to avoid negative effects on their credit score. In the above example, that means the cardholder with a $10,000 credit card limit shouldn’t owe more than $3,000 on the card.

How Much of Your Credit Limit Can You Use?

Technically, you can spend up to your credit limit. However, using too much of your total credit can adversely affect your credit utilization ratio, a key factor in determining your credit score.

It’s suggested to keep your credit utilization below 30% — which means using no more than 30% of your overall credit limit. This is why it’s always important to make payments, even if you’re in the process of requesting a credit card chargeback or other dispute.

How Is Your Credit Limit Determined?

The formula for determining a credit card limit depends on which scoring model the card provider uses. Generally, one of three distinct credit limit models is used: credit-based limits, predetermined credit limits, or customized limits.

Credit-Based Limits

With credit-based limits, card providers leverage your credit score to determine credit limits. In doing so, card companies rely on the same financial formula that credit scoring agencies use to create a credit score — a cardholder’s payment history, credit utilization rate, total length of credit history, credit mix, and any new credit inquiries. Card companies may also take a close look at the card owner’s total annual income, total household expenses, and type of employment.

Basically, the better you are at making on-time credit card payments, curbing household debt, and handling consumer credit, the more likely you are to get a higher credit card limit under the credit-based limits model.

Predetermined Credit Limits

This credit limit calculation model relies on a “ladder approach” to determine credit limits. In this scenario, credit card issuers assign a credit limit based on the type of card. In other words, every card in a certain tier — such as an entry-level card or a premium rewards card — would come with the same credit limit rather than the credit limit being determined based on the individual consumer.

The more features and amenities a chosen credit card has, the higher the credit limit typically is under this model. For example, a premium credit card with robust benefits and generous cash-back rewards may have a credit limit of $10,000. Meanwhile, a more bare bones credit card for entry-level cardholders may have a credit limit of $500.

Customized Credit Limits

With customized credit limits, card providers tailor the credit limit to the individual credit card consumer. They may do so in different ways based on different criteria.

For example, one credit card issuer may base its decision on a cardholder’s annual household income, while another may prioritize the number of credit cards an individual already owns, along with their existing credit limits.

In that way, card companies are drilling down into an individual’s financial history and basing their credit limit decision on myriad factors. Once again, the stronger a card candidate’s financial resume, the more likely that individual is to receive a higher credit card limit.

Can You Spend Over Your Credit Limit?

In general, credit card companies prevent spending over the credit card limit.

When a cardholder has reached their limit and attempts to use their credit card, the transaction may be declined.

In some instances, however, the card issuer may allow the transaction to go through and instead impose a financial penalty for spending over the credit card limit. According to the Credit Card Act of 2009 (CCA), the card company can’t assess a fee that’s more than the amount spent over the credit limit. So, for instance, if you overspent by $30, your fee couldn’t be more than $30.

Typically, the card owner must opt in to allow for purchases over the credit limit to be approved. The CCA legislation mandates that credit card companies can’t arbitrarily charge an over-the-limit fee without the cardholder’s signed consent. For that reason, most card providers have eliminated over-the-limit fees and simply deny the transaction instead.

Check with your card company to see if it still charges over-the-limit fees. If so, and you object, ask to opt out and focus on keeping your credit card balance well below your card spending limit.

Is It Possible to Increase Your Credit Card Limit?

Credit card limits aren’t static. They can go up — especially if a card customer asks for a credit limit increase — and they can also go down.

Perhaps the easiest way to increase your credit limit is to contact your card provider and ask for a credit limit boost. You can usually make this request over the phone or on the card issuer’s website or mobile app.

Before you make any request for a credit card limit increase, check your credit report to see that your financial health is in good standing, as your card provider will likely treat your request for a credit limit hike like any request for credit. That means a thorough credit check to ensure your credit card payment history is strong, your credit score is good, and your job situation or annual household income hasn’t deteriorated.

The credit card company will review those financial factors and let you know whether or not your request for a credit increase is approved. If you’re denied a higher credit limit, your best recourse is to take some time to improve your credit score and build a stronger credit profile.

In some cases, you can apply for a new credit card with a higher credit limit. However, expect any new card issuer to conduct the same rigorous credit vetting your original card company conducted given how credit cards work.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Takeaway

Credit card companies assign credit card limits to consumers based on one of three typical models. Often, your ability to handle credit and pay it back on a timely basis comes into play when determining how high your credit limit is. If you’d like a higher credit card limit, you can ask your current card issuer if your financial status has improved, or you could consider applying for a new credit card.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can lenders change credit limits?

Yes, lenders can change credit limits — particularly if a credit card holder asks them to do so. But credit limits are unlikely to change for the better unless the cardholder has a solid credit history and financial situation.

What is a normal credit card limit?

That depends on the individual and credit card companies, but the average credit limit for U.S. cardholders is currently almost $30,000. That said, individual credit card limits can vary depending on a variety of factors, and can be as low as $300.

How do I get a high credit card limit?

A good way to get a high credit limit is to display habits that show creditors that you’re a low credit risk. That means paying your bills on time, keeping debt low, and having a robust credit history.

Photo credit: iStock/RgStudio

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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You can get a personal loan from many banks, online lenders, and credit unions. A type of unsecured loan, personal loans can be used to pay for just about any large expense.

You might use it to pay off credit card debt, an unexpected medical bill, or the cost of home renovations. Some people use these loans to fund a wedding or big vacation. Given the many ways these versatile loans can be spent, it’s no surprise that personal loans are a popular choice. Currently, 23.5 million Americans have unsecured personal loans, totaling about $245 billion.

If you’re thinking of getting a personal loan, read on to learn more about where you can get one and the pros and cons of each option.

Where Can You Get a Personal Loan?

In terms of where to get a personal loan, these loans are generally available through three main markets: banks, credit unions, and online lenders. (There are other types of personal loans available through physical storefronts and online, such as payday loans and pawnshop loans, but it’s wise to avoid these options. You’ll learn why in a minute.)

Banks

National and regional banks often offer personal loans, which you can typically apply for online or in person. A bank may be the first choice for consumers who are already account holders at that institution, especially since the loan amount can usually be deposited quickly and directly into their checking account.

Credit Unions

Credit unions are another popular option for where to source a personal loan — though generally, these loans are only available to those who are already credit union members.

Each credit union has its own eligibility requirements to open an account or otherwise do business with it, which may be based on where you live or what industry you work in. However, if you do have access to a credit union, you may find lower interest rates and more favorable terms there than at other financial institutions.

Recommended: Is It Hard to Get a Personal Loan?

Online Lenders

Online lenders have proliferated over the years. These days, a personal loan can be easy to find from one of these sources with just a few clicks.

Online lenders may offer instant or near-instant loan decisions. They also don’t require you to be a member of or an account-holder at any specific financial institution. That said, it may take longer to receive your check or transfer than it would if you were borrowing from a bank or credit union where you already hold an account.

Of course, you will want to carefully review the personal loan interest rates and fees you are offered.


💡 Quick Tip: Some personal loan lenders can release your funds as quickly as the same day your loan is approved.

Where Can You Get a Personal Loan With Bad Credit?

You can get a personal loan with bad credit from a few lenders, such as online ones and payday lenders, but it’s important to proceed with caution.

First, a little important background intel:

•   A personal loan with no collateral, also known as an unsecured personal loan, can be tough to qualify for if your credit history is less than perfect.

•   Since there’s no collateral, like a house or a car, for the lender to take if you fail to repay the loan, unsecured personal loans often come with steeper qualification requirements than other types of loans.

•   They may also have higher interest rates, especially for those whose credit could use some improvement. There are some lenders out there who specifically market their products to folks with lower credit scores — but beware. Sometimes these loans come with predatorily high interest rates and other drawbacks.

Online Private Lenders

The convenience and ubiquity of the online personal loan market is a mixed blessing. Sure, it’s easy to find a loan when you need one, but it’s also easy to fall into a bad deal.

Some online lenders specialize in offering loans for poor or no credit, but be sure to read all the fine print before you hit “submit” on your application. The loans may come with soaring interest rates, high origination fees, or hidden costs. Do your homework and vet the business you are borrowing from to make sure it’s legitimate. You may want to check with the Better Business Bureau to search for any complaints on file and for reliable, verified reviews.

Payday Lenders

Payday loans have been around for a long time, but that doesn’t mean they’re a good option.

Designed to be repaid quickly (i.e., at the borrower’s next payday), these short-term cash loans may be for small amounts, but often come with astronomical interest rates. According to the Consumer Financial Protection Bureau, it’s not uncommon for these quick-turnaround loans to have APRs as high as 400%!

In almost every instance, when comparing payday loans vs. personal loans, payday loans are worth avoiding. Other forms of unsecured loans will likely come with lower interest rates and more favorable repayment terms. Fortunately, it is possible to find loans from reliable lenders — even with imperfect credit.

Banks and Credit Unions

You can get a personal loan with bad credit from a few lenders, such as online ones and payday lenders, but it’s important to proceed with caution.

First, a little important background intel:

•   A personal loan with no collateral, also known as an unsecured personal loan, can be tough to qualify for if your credit history is less than perfect.

•   Since there’s no collateral like a house or a car, for the lender to take if you fail to repay the loan, unsecured personal loans often come with steeper qualification requirements than other types of loans.

•   They may also have higher interest rates, especially for those whose credit could use some improvement. There are some lenders out there who specifically market their products to folks with lower credit scores—but beware. Sometimes these loans come with predatorily high interest rates and other drawbacks.

Another place where you can go to get a personal loan of this sort is a bank or credit union. Each financial institution sets their own qualification requirements for their unsecured personal loans, so it’s worth shopping around to find the best fit for your financial needs. Additionally, they may have other products that could work for you, like secured credit cards or share-secured loans.


💡 Quick Tip: Just as there are no free lunches, there are no guaranteed loans. So beware lenders who advertise them. If they are legitimate, they need to know your creditworthiness before offering you a loan.

What Are Some Pros and Cons of Different Types of Lenders?

Now that you’ve learned about the main options for personal loan shopping, you can figure out which kind of lender is right for you. Each alternative comes with its own pros and cons. Here are some things to consider while you’re browsing.

Personal Loans From Banks

Personal Loans From Credit Unions

Personal Loans From Online Lenders

Choosing a Personal Loan Lender

No matter where you choose to apply for a personal loan, the best way to determine whether it’s the right loan for you is to look at the fine print. The lender matters less than the loan, and knowing what you’re agreeing to ahead of time is key to avoiding an unpleasant financial surprise.

Here are the most important factors to look for when shopping around for a personal loan:

•   Fees, such as origination fees, early repayment penalties, and late fees, can increase the total amount you’ll spend on your loan in no time. Ideally, you’ll want to look for a lender that charges few fees — or none at all.

•   Interest rates can vary widely with unsecured personal loans, from as low as 4% to as high as 30% or more. While your specific options will vary based on your credit history and other financial information, it’s good to shop around for the lowest possible interest rate.

•   Loan amount caps may be relatively small (e.g., $1,000) or very large ($100,000 or more). Whatever your financial need, you want to ensure your lender will offer enough for you to cover whatever expense you’re paying for.

Recommended: Personal Loan Calculator

The Takeaway

There are many personal loan lenders to choose from, including banks, credit unions, and online lenders. Whether you need money to pay for an unexpected expense, such as a car repair, or you’re planning the ultimate 40th birthday party, it’s wise to shop around and compare interest rates, fees, and speed of funding.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Where is the best place to get a personal loan?

In terms of where to get a personal loan, there isn’t one “best” place. When comparing banks, credit unions, and online lenders, look at interest rates, fees, customer reviews, and how quickly the loan would fund to determine the option that suits you best.

Where is the best place to get a small personal loan?

Where to go to get a personal loan depends on a variety of factors. Would you be more comfortable working with a large lender or a small, community-based lender for your small loan? Do you already have an account at a financial institution that also makes personal loans? It might also depend on how much you want to borrow because different lenders have different borrowing ranges.

Where is the easiest place to get a personal loan?

If you’re looking for where you can go for a personal loan, it might be best to start at a financial institution where you already have an account. In that case, your financial information will be on record, making the process faster and easier. Although online lenders may promise super-fast funding, be sure to research options carefully and make sure the business is legitimate and interest rates are affordable.

Photo credit: iStock/solidcolours

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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When you open a new checking or savings account, some financial institutions require you to make a minimum opening deposit, which might be anywhere from $25 to $100. In some cases, you may also need to meet certain ongoing minimum balance requirements to avoid fees or qualify for a certain annual percentage yield (APY).

Fortunately, there are banks, credit unions, and other financial institutions that don’t require a minimum deposit so you can stash and spend your money even if you’re low on cash. Here are key things to know about minimum deposit and balance requirements for bank accounts.

What Is a Minimum Deposit?

A minimum deposit is the lowest amount of money you need to open a new bank account with a bank or credit union. It can also refer to the minimum balance you must maintain in order to receive certain perks or avoid fees.

Minimum deposits vary depending on the type of account and the financial institution. Some banks do not request a minimum deposit to open a basic checking or savings account, while others require between $25 and $100. Generally, higher minimum deposits are associated with premium services and higher APYs.

If you’re in the market for a bank account, it’s a good idea to check with the bank or credit union to determine whether an initial deposit is required, your options for depositing the funds, and if there are any ongoing balance requirements.

Types of Minimum Balance Requirements

When researching checking and savings accounts, keep in mind that there are typically two types of minimum balance requirements. Let’s clarify those terms, since they can sometimes be used interchangeably and cause confusion.

Minimum Opening Deposits

A minimum opening deposit is the amount of money required to activate a new account, such as a checking, savings, or money market account, or a certificate of deposit (CD). Generally, a money market account or CD will come with a higher opening deposit than a basic savings or checking account.

You can usually make a minimum opening deposit by transferring money from an account at another bank or from an account you already have at that same bank. You can also usually make an opening deposit using a check, money order, or debit card. Keep in mind you are not limited to making the minimum opening deposit — you can typically open a bank account with more than the required minimum.

There are some financial institutions that offer accounts with no minimum opening deposits. However, it’s important to read the fine print. In some cases, these accounts may require you to make a deposit within a certain timeframe (such as 60 days) in order to keep the account open.

Minimum Monthly Balance

A minimum monthly balance is the amount of money that must be maintained in the account each month to enjoy certain benefits or avoid fees. These minimums can range anywhere from $100 to $2,500, depending on the institution and type of account. If you opt for an account with a balance minimum, you may be able to set up alerts on your bank’s app to let you know when your funds are slipping below a certain threshold.

Minimum balance requirements can vary in their specifics, but typically fall into one of these three categories.

•   Minimum daily balance: This requirement means you need to maintain a minimum amount of money in your account each day to avoid fees or qualify for certain benefits, like earning interest.

•   Average minimum balance: Banks calculate this by adding up the balances in your account at the end of each day over a statement period, then dividing that total by the number of days in the period.

•   Minimum combined balance: This involves averaging the total amount of money you have across multiple accounts, such as a checking and a savings account, each month. This combined average must meet the minimum balance requirement to avoid fees or earn benefits.

How Do Minimum Deposits Work?

Minimum deposits work by setting a threshold that must be met to open or maintain a bank account. The minimum opening deposit is required to open a new account, while the minimum monthly balance must be maintained each month (or day) to avoid fees or earn a higher interest rate. It’s important to note that the minimum opening deposit is a one-time requirement, while the minimum monthly balance must be maintained on an ongoing basis.

In addition, some accounts may require a minimum monthly deposit (such as direct deposit of your paycheck) to qualify for certain account benefits, such as earning a higher APY or avoiding a monthly fee.

Real World Example of a Minimum Deposit

Let’s say you decide to open a savings account online at XYZ bank. The bank has a $50 minimum deposit to open the account and to start earning interest, so you transfer $50 into the account from an account you have at another bank.

XYZ bank also requires you to maintain a monthly minimum balance of $250 to avoid a $3 service fee. You’re not a fan of fees, so you keep tabs on your account and make sure you always have at least $250 in the account. To help, you set up an automatic alert on your banking app to let you know when the account dips below $250 so you can top up the account and avoid fees.

What Happens If You Don’t Maintain a Minimum?

If you fail to maintain the minimum monthly balance required by your bank, you may be charged a fee, lose any interest you were set to earn that month, or forgo other perks. The specific consequences vary depending on the financial institution and the type of account.

The Takeaway

Minimum deposits are an important aspect of managing a bank account. When you open a new checking or savings account, you may need to make a certain initial deposit to activate the account. You may also be required to keep the balance in the account above a certain threshold in order to avoid a monthly service fee or earn a certain interest rate.

It’s important to be aware of the minimum deposit requirements for your bank account. This helps ensure that you get all the perks of your bank account, while avoiding any unexpected costs.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is a minimum opening balance and how much is it?

A minimum opening balance is the initial deposit required to open a bank account. This amount varies depending on the bank and the type of account. For example, some banks may require as little as $25 to open a basic savings account, while others may require several hundred dollars for a checking account that earns interest.

What is a minimum monthly deposit and how much is it?

A minimum monthly deposit is the amount of money you must deposit into your bank account each month to avoid fees or earn certain perks, like a higher interest rate. This requirement varies by bank and account type. Some banks may not have a minimum monthly deposit requirement, while others may require a certain amount, such as $500 or $1,000, to be deposited each month to avoid fees.

What bank has no minimum balance?

Several banks and credit unions offer accounts with no minimum balance requirement. These banks include Ally, NBKC, SoFi, Discover, Connexus Credit Union, Ally, Capital One, and Chime.

Why do banks require an initial deposit?

Banks require an initial deposit to open an account for several reasons. First, it helps ensure that the account is legitimate and that the customer is serious about opening and maintaining the account. Second, it helps cover the costs associated with opening the account, such as processing paperwork and issuing a debit card. Finally, it helps the bank establish a relationship with the customer, which can lead to additional business in the future.

Photo credit: iStock/pinstock

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Car sales professionals make an average of $103,042 a year, according to Salary.com. While that’s more than what the average American worker earns annually, the job often requires long hours and your income may depend on how many cars you sell.

Let’s dive into what car salesmen do and how much they can make.

What Are Car Salesmen?

Car salespeople help customers shop for cars. Typical duties include answering questions about the cars on the lot, arranging test drives, and explaining financing options, warranties, and specifications.

Being able to build relationships with customers and close deals can help you succeed as a car salesman. Since car salespeople work directly with customers, the job may not be the best fit for introverts.


💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.

How Much Do Starting Car Salesmen Make a Year?

The average salary for entry-level car sales positions in the United States is $38,680 per year, according to ZipRecruiter data. The pay for entry-level jobs in car sales will likely differ based on the dealership’s size, location, and car brand.

While some employers pay a base wage, others offer commission-based pay. Base wages tend to provide a more consistent monthly income, usually between $2,000 and $4,000. With commission-based compensation, you may earn a portion of each sale, typically between 20% and 30%.

What Is the Average Salary for a Car Salesman?

If you’re looking to enter the field, you may wonder, how much does a car salesman make a year?

As mentioned above, the average annual salary for a car salesman is a competitive $103,042, per Salary.com, though pay can range between $88,987 and $119,501. High-achieving salespeople may make more than six figures, particularly if they are employed by luxury car dealerships or in regions with wealthy buyer demographics.

Commission-based arrangements are also a major factor in determining overall income.

Recommended: What Trade Makes the Most Money?

What Is the Average Car Salesman Salary by State for 2024?

A car salesman may not be the highest-paying job in most states, but it can provide a good living. This is especially true if you happen to work in a state like California, New Jersey, or Alaska, where the position tends to pay more. Let’s see how salaries in 2024 vary by state.

Source: Salary.com

Car Salesman Job Considerations for Pay and Benefits

Flexible schedules and possible commissions and bonuses are some attractive parts of being a car salesman. Plus, dealerships might provide extra incentives, such bonuses for hitting or exceeding sales goals, corporate cars, and expense reimbursements. Retirement plans, health insurance, and employee car discounts may also be included in the benefits package.

Recommended: Work-From-Home Jobs for Retirees

Pros and Cons of a Car Salesman Salary

As with any profession, there are advantages and disadvantages of working as a car salesman.

Pros:

•   Performance-driven earnings. Commission-based pay can boost your income, especially during strong sales periods.

•   Flexibility. Compared to standard 9–5 jobs, the position may offer flexibility in terms of work hours.

•   Career advancement. A successful car sales career can lead to managerial roles and a path for professional advancement within the dealership.

•   Diverse work environment. Helping customers find a car that fits their needs and budget can be professionally satisfying.

•   Incentives and perks. Dealerships often provide extra bonuses and perks, such car discounts for staff members or opportunities for career advancement.

Cons:

•   Income volatility. If you earn a commission, your earnings could decrease during slow times.

•   Pressure to perform. Reaching sales goals is essential, and the stress of closing deals might lower your level of job satisfaction.

•   Long hours. In order to accommodate consumers, you’ll likely need to work weekends and evenings.

•   Customer relations. Resolving complaints and interacting with a variety of client personalities can be difficult.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

How much does a car salesman make? These professionals have the potential to earn $100,000 or more a year, especially if they can earn a commission based on their sales. They also have the chance to advance their careers and gain a variety of work experiences. That said, the job often requires long hours, income may not be steady, and there’s often a pressure to hit sales goals.

Whatever type of job you pursue, you’ll want to make sure your earnings can cover your everyday living expenses. Establishing a budget — and using online tools to help monitor spending — can help you make progress toward your financial goals.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

With SoFi, you can keep tabs on how your money comes and goes.

FAQ

Can you make $100k a year as a car salesman?

Yes, it is possible to make $100,000 or more as a car salesman. Your salary may depend on your location, base pay, the car brand being sold and how many cars you sell each month.

Do people like being a car salesman?

Some people love being a car salesman, but the job is not a good fit for everyone. Those who enjoy making sales and building customer relationships may enjoy a career as a car salesman.

Is it hard to get hired as a car salesman?

The difficulty of getting hired as a car salesman depends on factors such as the dealership, car brand, location, and your experience. If you’re a people person, willing to put in time, and eager to make sales, you can likely find a position at a dealership.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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